Technology will continue to play a critical role as the challenges facing the financial industry intensify. Such challenges may include but are not limited to, volatile capital market returns and margin compression. Those embracing innovative technology will be better placed and more capable of adapting to changes thus enabling rapid business transformation as well as maximising efficiency and value creation. Thus far, Intelligent Machines have been predominantly used by Asset Management firms to boost operational efficiencies.
So, where have we seen the adoption of Intelligent Machines in investment management?
- Identifying trends and patterns to support sales and distribution, product pricing, trade allocation, portfolio construction and analytics
- Streamlining processes across middle and back office activities including trade support, reference data analysis, performance attribution, account set-up and customer onboarding
AI-enabled processes are being increasingly built on modular and cloud-based architecture to enable more agile operating models. Cloud-based architecture makes it easier for firms to “plug and play” with third-party services, such as Fundipedia. Continuous investment in AI-enabled data solutions can help firms improve services through innovation and reduce costs and overheads. Laborious data reconciliation, for example, could become a thing of the past with Fundipedia’s data reconciliation module.
It is important to consider the wider applications of AI in asset and wealth management, which could reach far beyond cost reduction and efficient operations. Think sentient, real-time optimisation of sales and marketing interactions and client services, predictive market modeling, self-creating exchanges with complete price transparency, to name but a few. Many investment management firms have taken note of these possible AI capabilities. Those who have taken notice have begun actively exploring and applying cognitive technologies and AI to various business functions across the industry value chain. For example, earlier this year, BlackRock (the world’s largest asset manager) announced the creation of a new centre specifically dedicated to research in AI—the “BlackRock Lab for Artificial Intelligence”.
So, where will this journey take your firm? The possibilities are endless.
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